4 Most Common Banking Myths in the Cannabis Business
Every business and every industry is surrounded by its own myths and prejudice and the cannabis industry is no different. There is a great deal of misinformation — hence why people need to properly educate themselves to avoid confusion.
To this end, we have compiled a list of the most common banking myths that surround the cannabis business today.
Myth number 1: It’s not possible to get a bank account for a marijuana-related business (MRB).
As bankers report, this is one of the most widespread myths; the great majority of licensed cannabis businesses are, in fact, banked by reputable institutions. Prior to January 1, 2018, banks would not cooperate with cannabis businesses, simply because the state-legal program was not defined clearly enough.
Myth number 2: The cannabis industry can’t be banked by credit unions and banks.
As long as they comply with the 2014 FinCEN guidance, and have a regulatory compliance program, banks and credit unions can bank cannabis businesses.
Myth number 3: Dispensaries that have a bank account can offer credit and debit card transactions.
Currently, this is not possible, and any dispensary that accepts credit or debit cards uses a third-party processor to lie about the nature of their business. Moreover, this is viewed as lying to a financial institution and can spell a $1 million fine or 30 years in prison.
At this time, cash and transparent electronic transfers are the safest paying option in the cannabis business.
Myth number 4: Legacy cash can be deposited in an MRB bank account.
Legacy cash is the income that a cannabis business may have earned before starting a relationship with a bank or a credit union. Banks have no way of knowing whether this legacy cash is legitimate and whether a cannabis business can prove the origin of the money; it may not even enter the financial system.
Banking and regulatory systems have greatly changed since the legalization of the cannabis business, and they will surely continue to grow together. Once the cannabis business becomes legal on the federal level, more and more branded card networks and financial institutions will start collaborating with cannabis businesses.